Henry Group IR14/15 A5.pdf 1 10/12/14 17:24 · Recognition of hedging reserve of derivative...

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Henry Group_IR14/15_A5.pdf 1 10/12/14 17:24

CONTENTS

2 Board of Directors and Committees

3 Corporate Information

4 Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income

6 Condensed Consolidated Statement of Financial Position

8 Condensed Consolidated Statement of Changes in Equity

9 Condensed Consolidated Statement of Cash Flows

10 Notes to the Condensed Consolidated Interim Financial Statements

22 Management Discussion and Analysis

33 Additional Information Required under the Listing Rules

Interim Report 2014/1502

BOARD OF DIRECTORS AND COMMITTEES

Board of DirectorsExecutive directorsMr. Ng Ian (Chairman)

Mr. Chan Kwok Hung

Non-executive directorsMr. Ng Chun For, Henry

Mr. Mak Wah Chi

Independent non-executive directorsMr. Li Kit Chee

Mr. Chan Kam Man

Mr. Chu Tak Sum

CommitteesAudit CommitteeMr. Li Kit Chee*

Mr. Mak Wah Chi

Mr. Chan Kam Man

Nomination CommitteeMr. Chan Kam Man*

Mr. Mak Wah Chi

Mr. Chu Tak Sum

Remuneration CommitteeMr. Li Kit Chee*

Mr. Mak Wah Chi

Mr. Chu Tak Sum

* Committee Chairman

Henry Group Holdings Limited 03

CORPORATE INFORMATION

Principal Place of BusinessSuite 1711

Tower 2 Times Square

1 Matheson Street

Causeway Bay

Hong Kong

Registered OfficeClarendon House

2 Church Street

Hamilton HM 11

Bermuda

Authorised RepresentativesMr. Chan Kwok Hung

Mr. Lee Pui Lam

Company SecretaryMr. Lee Pui Lam

Principal Share Registrar and Transfer OfficeMUFG Fund Services (Bermuda) Limited

The Belvedere Building

69 Pitts Bay Road

Pembroke HM08

Bermuda

Hong Kong Branch Share Registrar and Transfer OfficeTricor Standard Limited

Level 22

Hopewell Centre

183 Queen’s Road East

Hong Kong

Corporate Websitewww.henrygroup.hk

Investor and Media RelationsStrategic Financial Relations Limited

Stock Code859


CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOMEFor the six months ended 30 September 2014

The board of directors (the “Board”) of Henry Group Holdings Limited (the “Company”) is

pleased to present the unaudited condensed consolidated interim financial statements of the

Company and its subsidiaries (collectively the “Group”) for the six months ended 30

September 2014, together with the comparative unaudited figures for the corresponding

period in 2013 as follows:

UnauditedSix months ended 30 September

2014 2013Notes HK$’000 HK$’000

Turnover 25,577 26,187

Other income and gains 6,481 3,119Net loss in fair value of investment properties — (28,425)Administrative and operating expenses (22,554) (24,801)

Profit/(loss) from operations 9,504 (23,920)Finance costs 4 (12,930) (18,516)

Loss before taxation (3,426) (42,436)Taxation 5 (1,238) 5,994

Loss for the period 6 (4,664) (36,442)

Other comprehensive income,

net of income taxItems that maybe reclassified

subsequently to profit or loss:Exchange difference arising

on translating foreign operations — 8,765Recognition of hedging reserve

of derivative financial instruments — 2,968

Other comprehensive income for the period,

net of income tax — 11,733

Total comprehensive loss for the period (4,664) (24,709)


For the six months ended 30 September 2014

CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME


2014 2013Notes HK$’000 HK$’000

Loss for the period attributable to:— Owners of the Company (4,664) (16,686)

— Non-controlling interests — (19,756)

(4,664) (36,442)

Total comprehensive loss attributable to:— Owners of the Company (4,664) (11,088)— Non-controlling interests — (13,621)

(4,664) (24,709)

(Restated)Loss per share attributable to owners

of the Company 8— Basic (HK cents) (0.60) (2.30)

— Diluted (HK cents) (0.60) (2.30)


CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITIONAt 30 September 2014

Unaudited Audited

30 September

2014

31 March

2014

Notes HK$’000 HK$’000

ASSETS AND LIABILITIES

NON-CURRENT ASSETSProperty, plant and equipment 192 267

Investment properties 2,006,800 2,006,800

Deferred tax assets 1,353 1,137

2,008,345 2,008,204

CURRENT ASSETSTrade and other receivables 9 3,510 4,067

Available-for-sale financial assets 74 74

Pledged bank deposits 15,004 15,004

Cash and bank balances 1,141,905 964,792

1,160,493 983,937

CURRENT LIABILITIESOther payables, rental deposits received

and accruals, current portion 7,621 6,843

Bank borrowings, current portion (secured) 10 26,750 26,750

Derivative financial instruments (secured),

current portion 3,365 —

Tax payable 1,426 600

39,162 34,193


At 30 September 2014

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

Unaudited Audited

30 September

2014

31 March

2014

Notes HK$’000 HK$’000

NET CURRENT ASSETS 1,121,331 949,744

TOTAL ASSETS LESS CURRENT

LIABILITIES 3,129,676 2,957,948

NON-CURRENT LIABILITIESOther payables and rental deposits

received, non-current portion 10,929 10,207

Bank borrowings, non-current portion

(secured) 10 994,749 973,124

Derivative financial instruments (secured),

non-current portion — 4,883

Deferred tax liabilities 10,924 10,296

1,016,602 998,510

NET ASSETS 2,113,074 1,959,438

CAPITAL AND RESERVESShare capital 11 92,835 74,302

Reserves 2,020,239 1,885,136

TOTAL EQUITY 2,113,074 1,959,438


CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITYFor the six months ended 30 September 2014

Attributable to owners of the Company

Share capital

Share premium

Special reserve

Capital reserve

Share-based

payment reserve

Contribution from

shareholdersOther

reserveRetained

profits TotalHK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000

At 31 March 2014 (Audited) 74,302 558,303 9,628 926 21,719 250,139 1,119 1,043,302 1,959,438

Loss for the period — — — — — — — (4,664) (4,664)

Total comprehensive loss for the period — — — — — — — (4,664) (4,664)Issue of shares upon open offer 14,860 111,453 — — — — — — 126,313Transaction costs attributable to issue of

shares on open offer — (2,726) — — — — — — (2,726)Issue of share upon exercise of share options 3,673 31,634 — — (11,954) — — — 23,353Recognition of share-based payment — — — — 11,360 — — — 11,360

At 30 September 2014 (unaudited) 92,835 698,664 9,628 926 21,125 250,139 1,119 1,038,638 2,113,074

Attributable to owners of the Company

Share capital

Share premium

Hedging reserve

Special reserve

Capital reserve

Share-based

payment reserve

Exchange reserve

Contribution from

shareholdersOther

reserveRetained

profits

Non-controlling

interests TotalHK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000

At 31 March 2013 (Audited) 71,642 537,866 (8,278) 9,628 926 23,383 17,142 250,139 29,166 917,733 635,671 2,485,018Recognition of hedge reserve

of derivative financial instruments — — 2,968 — — — — — — — — 2,968

Exchange differences arising from translation of financial statements of overseas subsidiaries — — — — — — 2,630 — — — 6,135 8,765

Other comprehensive income for the period — — 2,968 — — — 2,630 — — — 6,135 11,733

Loss for the period — — — — — — — — — (16,686) (19,756) (36,442)

Total comprehensive income/(loss) for the period — — 2,968 — — — 2,630 — — (16,686) (13,621) (24,709)

Gain on discharge of loans due to a non-controlling shareholder — — — — — — — — — — 287,469 287,469

Lapse of share options — — — — — (1,969) — — — 1,969 — —Recognition of share-based

payment — — — — — 8,521 — — — — — 8,521

At 30 September 2013 (unaudited) 71,642 537,866 (5,310) 9,628 926 29,935 19,772 250,139 29,166 903,016 909,519 2,756,299



CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS


2014 2013

HK$’000 HK$’000

Net cash generated from operating activities 16,704 101,613

Net cash generated from (used in) investing activities 4,774 (107,677)

Net cash generated from financing activities 155,635 60,958

Net increase in cash and cash equivalents 177,113 54,894

Effect of foreign exchange rates changes — 1,328

Cash and bank balances classified

as assets held for sale — 49,512

Cash and cash equivalents at beginning of the period 964,792 379,202

Cash and cash equivalents at end of the period 1,141,905 484,936


NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTSFor the six months ended 30 September 2014

1. BASIS OF PREPARATIONThe unaudited condensed consolidated interim financial statements for the six months

ended 30 September 2014 (the “Interim Financial Statements”) have been prepared in

accordance with Hong Kong Accounting Standard (HKAS) 34 “Interim Financial

Reporting” issued by the Hong Kong Institute of Certified Public Accountants (“HKICPA”)

and with the applicable disclosure provisions of Appendix 16 to the Rules Governing the

Listing of Securities on The Stock Exchange of Hong Kong Limited (the “Listing Rules”).

These Interim Financial Statements should be read in conjunction with the annual

report for the year ended 31 March 2014.

2. APPLICATION OF NEW AND REVISED HONG KONG FINANCIAL REPORTING STANDARDS (“HKFRSs”)The Interim Financial Statements have been prepared under the historical cost basis as

modified for investment properties, available-for-sale financial assets and certain

financial instruments and derivative financial instruments, which are measured at fair

values.

The accounting policies used in the Interim Financial Statements are consistent with

those followed in the preparation of the Group’s annual financial statements for the

year ended 31 March 2014.

In the current period under review, the Company has applied, for the first time, the

following new and revised standards, amendments and interpretations (“new HKFRSs”)

issued by the HKICPA, which are effective for the Company’s financial period beginning

on 1 April 2014. A summary of the new HKFRSs are set out as below:

Amendments to HKFRS 10,

HKFRS 12 and HKAS 27

Investment Entities

Amendments to HKAS 32 Offsetting Financial Assets and Financial Liabilities

Amendments to HKAS 36 Recoverable Amount Disclosures for Non-Financial

Assets

Amendments to HKAS 39 Novation of Derivatives and Continuation of Hedge

Accounting

HK (IFRIC) — Int 21 Levies



NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

The application of those new HKFRSs in the current period under review has had no

material effect on amounts reported in these condensed consolidated financial

statements and/or disclosures set out in these condensed consolidated financial

statements.

The Group has not early applied the following new HKFRSs that have been issued but

are not yet effective:

Amendments to HKAS 16

and HKAS 38

Clarification of Acceptable Methods of Depreciation

and Amortisation4

Amendments to HKAS 16

and HKAS 41

Agriculture: Bearer Plants4

Amendments to HKAS 19 Defined Benefit Plans: Employee Contributions1

Amendments to HKAS 27 Equity method in separate Financial Statement4

Amendments to HKFRSs Annual Improvements to HKFRSs 2010–2012 Cycle2

Amendments to HKFRSs Annual Improvements to HKFRSs 2011–2013 Cycle1

Amendments to HKFRS 11 Accounting for Acquisitions of Interests in Joint

Operations4

HKFRS 9 Financial Instruments6

HKFRS 14 Regulatory Deferral Accounts3

HKFRS 15 Revenue from Contracts with Customers5

1 Effective for annual periods beginning on or after 1 July 20142 Effective for annual periods beginning on or after 1 July 2014, with limited exceptions3 Effective for first annual HKFRS financial statements beginning on or after 1 January 20164 Effective for annual periods beginning on or after 1 January 20165 Effective for annual periods beginning on or after 1 January 20176 Effective for annual periods beginning on or after 1 January 2018

The directors of the Company anticipate that the application of those new and revised

standards, and amendments issued but not yet effective will have no material impact

on the results and financial position of the Group.




3. SEGMENT INFORMATIONFor the six months ended 30 September 2014 and 2013, the Group was only engaged

in property leasing and development in Hong Kong and most of the assets of the

Group were located in Hong Kong as at 30 September 2014 and 31 March 2014

Information about major customersUnaudited turnover for the six months ended 30 September 2014 and 2013

represented gross income from leasing of investment properties. Included in unaudited

turnover of approximately HK$25,577,000 (2013: HK$26,187,000) are unaudited

turnover of approximately HK$6,780,000 (2013: HK$8,880,000) which arose from the

Group’s largest two (2013: two) customers with whom transactions in aggregate have

exceeded 10% of the Group’s unaudited turnover during the year.

Revenue from major customers, each of them amounted to 10% or more of the

Group’s unaudited revenue, are set out below:

2014 2013

HK$’000 HK$’000

Customer A 4,200 5,100

Customer B 2,580 3,780




4. FINANCE COSTS

Unaudited

Six months ended 30 September

2014 2013

HK$’000 HK$’000

Interest on bank borrowings

— wholly repayable within five years 4,997 6,444

— wholly repayable after five years 7,933 36,829

Imputed interest on interest-free loan

from a related party — 2,663

Interest on loan from a related party — 973

Interest on loans from shareholders — 262

12,930 47,171

Less: amount capitalised into investment

properties under construction of

the disposed subsidiary — (28,655)

12,930 18,516




5. TAXATION

Unaudited


2014 2013

HK$’000 HK$’000

The charge/(credit) comprises:

Profits tax — Hong Kong

— Provision for the period 826 151

— (Over-provision) in prior periods — (30)

826 121

Deferred taxation

— Change in fair value of

investment properties — (7,106)

— Others 412 991

412 (6,115)

1,238 (5,994)

Hong Kong profits tax has been provided at the rate of 16.5% (2013: 16.5%) on the

estimated assessable profits arising in or derived from Hong Kong.




6. LOSS FOR THE PERIOD

Unaudited


2014 2013

HK$’000 HK$’000

Loss for the period is arrived at after

charging/(crediting) the followings:

Directors’ remuneration 10,219 8,470

Other staff costs 5,321 8,179

Total staff costs 15,540 16,649

Depreciation of property, plant and

equipment 81 225

Share-based payment expenses 11,361 8,521

Fair value (gain)/loss of derivative

financial instruments (1,518) 4,883

Gross rental income from investment

properties, net of direct outgoings

of approximately HK$1,868,000

(2013: HK$1,111,000) (23,709) (25,076)

7. DIVIDENDSThe Directors do not recommend the payment of interim dividend for the six months

ended 30 September 2014 (2013: Nil).




8. LOSS PER SHAREThe calculation of basic and diluted loss per share attributable to owners of the

Company is based on the following data:

Unaudited


2014 2013

HK$’000 HK$’000

LossLoss for the period attributable to

owners of the Company for the

purpose of calculating basic and

diluted loss per share (4,664) (16,686)

Unaudited


2014 2013

Number of

ordinary shares

Number of

ordinary shares

(Restated)

Weighted average number of

ordinary shares (Note)

Weighted average number of ordinary

shares for the purpose of calculating

basic loss per share 778,816,469 726,888,341

Effect of dilutive potential ordinary

shares:

Share options 14,079,805 32,252,694

Weighted average number of ordinary

shares for the purpose of calculating

diluted loss per share 792,896,274 759,141,035




Diluted loss per share for the six months ended 30 September 2014 is the same as

basic loss per share as the share options outstanding at the end of reporting period

had an anti-dilutive effect on the diluted loss per share.

Note: The weighted average number of shares for the purposes of calculating loss per share for the six

months ended 30 September 2013 was adjusted to reflect the effects of open offer of shares in

September 2014.

9. TRADE AND OTHER RECEIVABLESIncluded in trade and other receivables were trade receivables of approximately

HK$2,229,000 (net of provisions) (31 March 2014: HK$2,077,000). Rental income from

leasing of investment properties are received in advance and sufficient rental deposits

are held to cover potential default risk. The trade receivables represented rental receipt

in arrears. The aging analysis of the Group’s trade receivables (net of provisions) is as

follows:

Unaudited Audited

30 September

2014

31 March

2014

HK$’000 HK$’000

Up to 30 days 1,806 1,907

31–60 days 95 1

61–90 days 106 110

More than 90 days 222 59

2,229 2,077




10. BANK BORROWINGS — SECURED

Unaudited Audited

30 September

2014

31 March

2014

HK$’000 HK$’000

Bank loans 1,021,499 999,874

Less: current portion (26,750) (26,750)

Non-current portion 994,749 973,124

The bank borrowings are repayable as follows:

Unaudited Audited

30 September

2014

31 March

2014

HK$’000 HK$’000

On demand or within one year 26,750 26,750

After one year but within two years 26,750 26,750

After two years but within five years 292,251 354,251

After five years 675,748 592,123

1,021,499 999,874

The bank borrowings are secured by the Group’s assets which were set out in the

paragraph under the heading “Charge On Group Assets” under the Management

Discussion and Analysis section of this interim report on page 30.




11. SHARE CAPITALNumber of Shares Amount

Number ’000 HK$’000

Ordinary shares of HK$0.10 each

Authorised:At 1 April 2013 (audited) and

31 March 2014 (audited) 1,000,000 100,000

Increase on 5 September 2014 (note a) 1,000,000 100,000

At 30 September 2014 (unaudited) 2,000,000 200,000

Issued and fully paid:At 1 April 2013 (audited) and

31 March 2014 (audited) 743,019 74,302

Issue of shares upon open offer (note b) 148,604 14,860

Issue of shares on exercise of share options

(note c) 36,729 3,673

At 30 September 2014 (Unaudited) 928,352 92,835

(a) Pursuant to an ordinary resolution passed at the annual general meeting held

on 5 September 2014, the authorised share capital of the Company has

increased to HK$200,000,000 divided into 2,000,000,000 ordinary shares by

the creation of an additional 1,000,000,000 ordinary shares accordingly.

(b) During the period, the Company allotted and issued 148,603,879 offer shares

under the open offer fully underwritten by the underwriter on the basis of one

offer share for every five existing shares held on the record date (“Open Offer”).

Details of the Open Offer were set out in the Company’s announcements dated

22 July 2014 and 5 September 2014.




(c) During the period, the Company allotted and issued 36,728,983 shares by virtue

of exercise of share options by a director in aggregate of 32,061,764 share

options under share option scheme adopted on 3 September 2003 and

4,667,219 share options adopted on 3 September 2013.

All the share issued by the Company during the six months ended 30 September 2014

rank pari passu with the then existing ordinary shares in all respects.

12. OPERATING LEASE ARRANGEMENTS The Group as lessee

At the end of the reporting period, the Group had commitments for future minimum

lease payments under non-cancellable operating leases for premises which fall due as

follows:

Unaudited Audited30 September

2014

31 March

2014HK$’000 HK$’000

Within one year 582 1,084

In the second to fifth year inclusive 1,028 1,562

1,610 2,646

Operating lease payments represented rental payables by the Group for certain of its

office premises and warehouse premises. Leases are negotiated for an average term

of 3 years and rentals are fixed during the lease period.




The Group as lessorAt the end of the reporting period, the Group had contracted with certain tenants

for the following future minimum lease receivables:

Unaudited Audited

30 September

2014

31 March

2014

HK$’000 HK$’000

Within one year 42,115 37,064

In the second to fifth year inclusive 34,098 21,046

76,213 58,110


MANAGEMENT DISCUSSION AND ANALYSIS

Marketplace2014 has been a challenging year for the Hong Kong economy as it has experienced a decline

in growth and is running at a below-trend pace. According to research by Hong Kong Trade

Development Council dated 28 October 2014, the Hong Kong economy achieved a

disappointing real Gross Domestic Product (“GDP”) growth rate of 2.2% in the first half of

2014 as compared to earlier forecasts of 3–4% — and 2.9% for the corresponding period

of 2013. The labour market has however held steady and posted an unemployment rate of

3.3%, which is nearly the lowest level in 16 years. The value of retail sales for the first eight

months of 2014 decreased by 1% as compared with the corresponding period of 2013.

However, when the second quarter of 2014 is viewed separately, retail sales value actually

plummeted by 7% — the sharpest quarterly decline since 2003 — and retailers unexpectedly

experienced lower sales during the Golden Week. The latter was due to a high base of

comparison, with frenzied sales of jewelry and watches enjoyed during the corresponding

quarter of 2013.

Against this backdrop, sentiment within Hong Kong’s retail property market has been eroding

and remained soft during the period under review. On the leasing front, there has been

increasing vacancies in popular second and third-tier streets, particularly in Causeway Bay

where rents for prime location first-tier shops have been flattening; there has been a slower

uptake of rental spaces; and a greater number of early lease terminations. The aforesaid

phenomenon is evidence that the less robust leasing market has been affected by a slowdown

in Hong Kong’s retail sales, which also reflects a change in the spending pattern of tourists

from Mainland China, with the current trend towards shopping for more basic necessities

instead of luxury goods. Moreover, it can be concluded that the rental adjustment cycle of

the Hong Kong leasing market has passed its peak. The adverse trend has been aggravated

by the introduction of rules against extravagance and an anti-corruption campaign in Mainland

China which continues to have a dampening effect on sales of luxury goods, particularly

jewelry and watches. On the sales front, the market has remained inactive; posting

continuously low registered transaction volume — impacted by the government’s harsh

measures to curb speculation (extra higher stamp duties) which drove investors away from

the market and to the sidelines. The post-introduction of government measures and stamp

duty amendments passed in July 2014 had the inverse effect of driving up the prices of

properties once available on the market and thus it is expected that a sharp fall in the prices

of retail properties will be unlikely due to the extremely limited supply of street shops and

properties in prime locations, as well as increasing demand for retail spaces as investor favor



prime locations. During the period under review, several notable transactions for shops in

first-tier districts repeatedly hit record highs in Hong Kong, namely (i) the sale of a spacious

four-storey shop on Hennessy Road, Causeway Bay for HK$600 million in early 2014; and

(ii) a 200 square feet ground-floor shop on Percival Street, Causeway Bay for HK$185 million.

In addition, recent sales transactions involving shopping malls (including the sale of shopping

centers by The Link REIT in mid-2014) fetched more than HK$1 billion, despite the fact that

the malls are not located in prime shopping districts. The sales had been well received by

the market and the transaction prices were recorded above market expectations. Accordingly,

our management team is cautious about the uncertain market conditions and has adopted

a conservative approach towards exploring the possible acquisition of target properties, and

will pursue our business plan in line with market conditions. At the same time, the Group

has managed to optimize its operation costs to cope with subdued market sentiment as well

as the possible deterioration of the market should the “Occupy Central” movement intensify

or continue for a prolonged period.

Business review and performanceFor the six months ended 30 September 2014, the Group recorded unaudited turnover of

approximately HK$25.6 million, which was principally derived from rental income generated

by its investment property portfolio in Hong Kong (2013: HK$26.2 million). The Group’s

quality core properties — Jardine Center and L’hart — located on prime streets in Causeway

Bay feature a well balanced tenant mix that has been warmly received by local consumers

and tourists. During the period under review, the sluggish leasing market sentiment dragged

down the Group’s overall occupancy rate from 98% in 2013 to 90% in 2014. The Group’s

turnover was inevitable affected and moderately subdued. In response to the market

conditions, the Group has adopted a prudent approach towards managing its investment

properties, placing greater energies into the retention of premium tenants. Moreover, the

Group has enhanced its competitiveness and capacity for growth by implementing an asset

enhancement program, which is a continuous process aimed at creating value and offering

shoppers a more comfortable and welcoming environment. Such conditions are also beneficial

to attract new tenants and thereby satisfy the changing needs of consumers. The program

includes but is not limited to the renovation of the ground floor main lobby; improvement

of the podium façade to attract customer traffic; and additional works for the improvement

of accessibility and flow of pedestrian traffic. The Group has and will continue to align its

diverse retail tenant mix to satisfy the needs of local customers and shoppers, as well as the

tastes and interests of tourists.



Fully geared up for expansionOn 4 September 2014, the Company announced the results of an open offer fully

underwritten by the underwriter on the basis of one offer share for every five existing shares

held on the record date at a subscription price of HK$0.85 per offer share (“Open Offer”),

pursuant to which, the Company allotted and issued 148,603,879 offer shares under the

Open Offer and thus the issued share capital of the Company has been enlarged from

743,019,399 ordinary shares to 891,623,278 ordinary shares. The Board believes that the

Open Offer is in the best interest of the Company and its shareholders as a whole as it

offers all of its shareholders with the opportunity to participate in the enlargement of its

capital base and future development, and to maintain their proportional interest in the

Company. The Open Offer will bolster the Company’s financial resources and provide the

Group with the flexibility to capture property investment and development opportunities in

a timely manner. The net proceeds raised by the Open Offer amounted to approximately

HK$123 million, which is intended for property investment and development.

In order to provide the Company with greater flexibility for future investment opportunities,

the Company, after receiving its shareholders’ approval at an annual general meeting

(“AGM”) held on 5 September 2014, will thereby increase the authorized share capital of

the Company to HK$200,000,000 divided into 2,000,000,000 ordinary shares by the creation

of an additional 1,000,000,000 ordinary shares.

ProspectsDuring the first half of the financial year ending 31 March 2015, the global economy showed

signs of stabilization and recovery. The Federal Reserve has finalized its timetable for tapering

quantitative easing measures, which reduce to its bond-purchase program; though remaining

committed to maintaining interest rates at low or near zero levels for a considerable time.

The latter announcement was undoubtedly intended to remove or lessen market concerns

about imminent interest rate hikes in the US. The euro zone and Japan consequently remained

subdued while the PRC has pledged to maintain the nation’s overall economic stability, thus

its economy is expected to be healthy despite the moderate GDP growth posted and the

property market losing steam caused by excess supply in second and third-tier cities. Looking

ahead, we believe that the global economy has been expanding at a moderate pace with

little turbulence, and thus the path to recovery should continue in the second half of the

financial year ending 31 March 2015.



In Hong Kong, its economy regained some momentum in the third quarter of 2014, growing

by 2.7% in real terms over a year earlier, and up from the 1.8% in the second quarter.

However, the “Occupy Movement” that has affected the city since late September 2014 and

rising political tensions are causing disruptions to economic activities, particularly retail and

catering activities in the affected districts. If the “Occupy Movement” continues and affects

wider local economic sentiment, real GDP is expected to fall below 2.2% as previously

projected. On the bright side, the financial markets have been unaffected by the launch of

the newly approved Shanghai-Hong Kong Stock Connect program, which is expected to

stimulate investment activity across the board; boost local consumption sentiment; and allow

Hong Kong to continue playing a key role as an offshore Renminbi (“RMB”) business center

promoting the internationalization of the national currency. Additionally, the possible U.S.

interest rate-hike cycle has not yet started and Hong Kong’s low interest environment is

expected to continue, thereby sentiment is likely to improve.

The second half of the financial year ending 31 March 2015 and the year ahead should

present challenges, uncertainties and opportunities. While Jardine Center and L’hart should

continue to drive the Group’s business development and provide a solid foundation for its

investment properties to achieve steady growth, we will also seek to capture current market

opportunities, which include attracting retailers to the upper floors of the Group’s properties

given the high cost of street-level shops in traditional prime shopping districts. At the same

time, the Group will continue to closely monitor market changes as it adopts a prudent

approach to develop its businesses.



FINANCIAL REVIEWTurnoverDuring the period under review, the Group recorded unaudited consolidated turnover of

approximately HK$25.6 million, representing a modest decline of approximately 2.3% as

compared to approximately HK$26.2 million for the corresponding period last year. Turnover

was primarily derived from rental income from leasing of investment properties in Hong Kong

of which Jardine Center remained the main revenue driver of the Group; contributing

approximately HK$16.8 million (2013: HK$15.6 million), thus accounting for approximately

66% of the unaudited consolidated turnover of the Group (2013: 60%). The decline in

turnover was primarily due to an unfavorable and sluggish leasing retail property market

caused by a slowdown in the Hong Kong retail market, in turn the result of the economic

slowdown and anti-corruption campaign affecting China.

Other income and gainsUnaudited other income and gains for the period under review amounted to approximately

HK$6.5 million, representing an increase of approximately 108% as compared with

corresponding period last year. It was mainly attributable to the increase in bank deposits

interest income generated from the receipts of cash inflows generated from realization of

the sale consideration of disposal of subsidiaries (“Disposed Subsidiaries”) announced on 28

November 2013 (“Disposal Consideration”).

Administrative and operating expensesUnaudited administrative and operating expenses for the period under review amounted to

approximately HK$22.6 million, representing a decrease by approximately 9% as compared

with corresponding period last year. It was mainly due to (i) the curtailment of operational

costs of the Disposed Subsidiaries which solely held joint venture based shanghai project;

and (ii) also taken into account of the one-off and non-cash outflow accounting adjustment

for the share based payment expenses in respect of grant of share options announced on

30 April 2014.

Finance costsUnaudited finance costs for the period under review amounted to approximately HK$12.9

million were comprised of (i) interest expenses on the bank borrowings amounted to

approximately HK$11.2 million; and (ii) interest expenses on the interest rate swap contract



entered for hedging purpose amounted to approximately HK$1.7 million. It has decreased

by approximately HK$5.6 million as compared to approximately HK$18.5 million for the

corresponding period last year. The decrease was mainly attributable to (i) the reduction in

bank borrowings; and (ii) fully repaid of entire loans from related parties by application of

surplus cash generated from the Disposal Consideration in the second half of financial year

ended 31 March 2014.

Loss attributable to owners of the CompanyUnaudited loss attributable to owners of the Company for period under review was

approximately HK$4.7 million, representing a decrease of approximately 72% from

approximately HK$16.7 million recorded in the corresponding period last year. The decrease

was mainly attributable to the absence of sharing net loss in fair value of investment properties

held by the Disposed Subsidiaries. Unaudited loss per share attributable to owners of the

Company was approximately HK0.6 cents for the period under review, as compared to

approximately HK$2.3 cents (restated) recorded in the corresponding period last year.

Liquidity and financial resourcesThe Group mainly finances its business operations with its internal resources and bank

borrowings. As at 30 September 2014, the Group had cash and bank balances (including

pledged deposits) of approximately HK$1,156.9 million (as at 31 March 2014: HK$979.8

million). The increase in cash and bank balances was mainly attributable to the combination

of (i) net proceeds of the Open Offer amounted to approximately HK$123 million which

intended for the purpose of property investment and development (ii) new bank borrowing

with lower interest rate of approximately HK$100 million in order to strengthen liquidity

position; and (iii) issue of new shares by exercise of share options amounted to approximately

HK$23 million. The Group’s cash and bank balances are deposited in Hong Kong Dollars

(“HKD”), RMB and United States Dollar (“USD”) which mainly are preserved in risk-free bank

deposits to maintain highly liquidity financial resources available for facilitating future

investment activities and acquisition when opportunities arise. In addition, the Group has

granted by a bank for a new standby revolving line of approximately HK$100 million (as at

31 March 2014: HK$Nil) for unanticipated and non-recurring extraordinary needs of business

operation. Accordingly the Board considered that the Group has maintained adequate

financial resources to satisfy its working capital requirements and to meet its financial

obligations when they fall due in the foreseeable future.



As at 30 September 2014, the Group’s total bank borrowings all denominated in HKD and

are on a floating rate based in aggregate amounted to approximately HK$1,021.5 million (as

at 31 March 2014: HK$999.9 million) with maturity profile set out as follows:

Unaudited Audited

As at

30 September

2014

As at

31 March

2014

HK$’000 HK$’000

Repayable

Within 1 year 26,750 26,750

After 1 year but within 2 years 26,750 26,750

After 2 years but within 5 years 292,251 354,251

Over 5 years 675,748 592,123

1,021,499 999,874

To mitigate the adverse impact of interest rate upward exposure arising from long term

floating rate based bank borrowings, the Group has concluded the interest rate swap

arrangement with a bank thereby converting part of the Group’s bank borrowings from

floating interest rate into fixed interest rate.

The Group’s gearing ratio as of 30 September 2014, which is calculated on the basis of total

liabilities over total assets, was approximately 33.3% (as at 31 March 2014: 34.5%) whilst

the current ratio of the Group which expressed a ratio of current assets over current liabilities

as of 30 September 2014, to reflect the adequacy of the financial resources was approximately

29.6 (as at 31 March 2014: 28.8). The directors of the Company (the “Directors”) will

continue to adopt a prudent financial policy so as to sustain an optimal level of borrowings

to meet the Group’s funding requirements.



Capital StructureDuring the period under review, pursuant to the Open Offer the Company issued and allotted

148,603,879 new ordinary shares at HK$0.85 each and thus the issued share capital of the

Company enlarged from 743,019,399 ordinary shares to 891,623,278 ordinary shares.

Coupled with the new issue and allotment of 36,728,983 ordinary shares by virtue of exercise

of 36,728,983 share options, the issued share capital of the Company further increased from

891,623,278 ordinary shares to 928,352,261 ordinary shares as of 30 September 2014.

As at 30 September 2014, the unaudited net assets attributable to owners of the Company

amounted to approximately HK$2,113.1 million (as at 31 March 2014: HK$1,959.4 million),

representing an increase of approximately 7.8% as compared with the same as of 31 March

2014. With the total number of 928,352,261 ordinary shares in issue as of 30 September

2014, the unaudited net assets value per share was approximately HK$2.28 (as at 31 March

2014: HK$2.64).

Treasury PolicyThe Group’s business has been conducted in Hong Kong and its monetary assets and liabilities

are mainly denominated in HKD and with certain cash and bank balances placed as time

deposits denominated in RMB and USD for enhancement of its financial flexibility and deposits

yield. Since it is expected that there shall not be sharp depreciation of RMB and USD against

HKD in near future, the directors of the Company consider that no hedging measure against

RMB and USD exchange rate exposure is necessary at this stage but will closely monitor their

respective fluctuations.

INTERIM DIVIDENDThe Board does not recommend the payment of interim dividend for the six months ended

30 September 2014 (2013: Nil).



CHARGES ON GROUP ASSETSAt of 30 September 2014, the Group has pledged the following assets:

1. Investment properties in Hong Kong with an aggregate carrying amount of approximately

HK$1,994 million and assignment of rental proceeds for securing the bank borrowings

granted from several banks to its wholly-owned subsidiaries;

2. Pledged deposits of approximately HK$15 million for securing the interest rate swap

contract; and

3. Share mortgage of several wholly-owned subsidiaries for securing their respective bank

borrowings.

CONTINGENT LIABILITIES1. At of 30 September 2014, the Group has given several corporate guarantees with an

aggregate of approximately HK$1,535 million (At 31 March 2014: HK$1,266 million)

in favour of certain banks for securing banking facilities granted to its subsidiaries;

and

2. High Fly Investments Limited (“High Fly”), an indirect non-wholly subsidiary of the

Company which were dissolved by virtue of voluntary liquidation with the British Virgin

Islands BVI Registry of Corporate Affairs approved on 24 January 2014 and Premium

Assets Development Limited (“Premium Assets”) (collectively the “Indemnifiers”) had

signed Deed of Indemnity (the “Deed”) on 4 October 2013 (being date of completion

of the sale and purchase agreement (“SPA”) with Double Favour Limited (“Double

Favour”). Pursuant to the Deed, each of the Indemnifiers hereby severally, pro rata to

their respective shareholdings in the High Luck International Limited (“High Luck”)

immediately before completion of the SPA (i.e. 45% as to Premium Assets and 55%

as to High Fly) (the “Relevant Proportion”) undertakes to Double Favour (for itself and

as trustee of the High Luck and its subsidiaries (“Disposal Group”)) to pay them an

amount or amounts equal to each of the following:

(a) any liability to taxation in connection with any claim in respect of all taxation

falling on any member of the Disposal Group resulting from or by reference to

any transaction, event, matters or thing occurred or effected during the period



from 1 September 2007 to 4 October 2013 (being date of completion of the

SPA) (“Relevant Period”), or in respect of any gross receipts, income, profits or

gains earned, accrued or received, or alleged or deemed to have been earned,

accrued, or received by any member of the Disposal Group during the Relevant

Period, whether alone or in conjunction with any other circumstances whenever

occurring and whether or not such taxation is chargeable against or attributable

to any other person, firm or company; and

(b) all action, claims, losses, damages, cost (including all legal costs), charges,

expenses, interests, penalties or any other liabilities to which any member of

the Disposal Group is or may be subject or which any member of the Disposal

Group or Double Favour may reasonably and properly incur in connection with:

(i) any investigation, assessment or the contesting of any claim or any of

the matter referred to in (a) above;

(ii) the settlement of any claim or any of the matters referred to in (a) above;

(iii) any legal proceedings or actions in which the Purchaser or any member

of the Disposal Group claims under or in respect of the Deed and in

which judgment is given in favour of Double Favour or any member to

the Disposal Group; or

(iv) the enforcement of any such settlement or judgment, and each of the

Indemnifiers severally in the Relevant Proportion undertakes to indemnify

an hold harmless or demand any member of the Disposal Group and

Double Favour in respect of the matters referred to (a) to (b) (inclusive)

above.

Notwithstanding anything to the contrary herein provided and the guarantee provided in the

SPA, Double Favour further agrees and acknowledges to High Fly acting as trustee for the

benefit of Uptodate Management Limited (“Uptodate”), an indirect wholly owned subsidiary

of the Company and Best Task Limited that their respective obligations under the guarantee

in respect of any obligations arising from any claims against High Fly under the Deed and/

or the SPA (“Relevant Claims”), the obligations of Uptodate under the guarantee for such



Relevant Claims should only be limited to 54.55% of the said claims (i.e. not more than

30% of total claims).

Pursuant to the Deed, the Board is of the opinion that it would be unlikely for the Group

through Uptodate to suffer any material financial loss as a result of giving the aforesaid

indemnity on several basis limited to 30% of the Relevant Claims.

COMMITMENTSAs of 30 September 2014, the Group had no material capital commitments.

EMPLOYEES AND REMUNERATION POLICYAs of 30 September 2014, the Group had about 13 employees based in Hong Kong. The

Group offers its employees competitive remuneration packages which commensurate with

their performance, experience and job nature. The Group also provides other benefits

including but not limited to medical insurance and contributions to mandatory provident fund

schemes.

SIGNIFICANT INVESTMENTS, MATERIAL ACQUISITIONS AND DISPOSALSThe Group did not have any significant investments, material acquisitions or disposals during

the period under review.


ADDITIONAL INFORMATION REQUIRED UNDER THE LISTING RULES

SHARE OPTION SCHEMESThe Company has adopted a new share option scheme which was approved by the

shareholders of the Company at the annual general meeting held on 3 September 2013

(“2013 Scheme”) upon the share option scheme previously adopted on 3 September 2003

and lapsed on 2 September 2013 (“2003 Scheme”). Upon the expiration of the 2003 Scheme,

no further option could be granted under the 2003 Scheme, but the provisions of the 2003

Scheme shall remain in full force in all respects with its share options granted prior to such

expiry which will continue to be exercisable in accordance with the 2003 Scheme.

Details of the movements of the share options granted under the 2003 Scheme were as

follows:

Number of share options

Name of Grantee Notes Date of grant

Exercise price per

share before adjustments

Exercise price per

share after adjustments

(Note 10)

Outstanding as at 1 April

2014

Granted during

the period

Adjustments during

the period (Note 10)

Exercised during

the period

Outstanding as at

30 September 2014

HK$ HK$

Mr. Ng Chun For, Henry (Director)

(1) 28 October 2005 0.676 0.6663 2,000,000 — 29,225 (2,029,225) —

(2) 2 April 2007 0.686 0.6761 2,000,000 — 29,225 (2,029,225) —

(3) 31 August 2007 1.156 1.1394 1,000,000 — 14,612 (1,014,612) —

(4) 24 March 2010 0.45 0.4435 6,300,000 — 92,061 (6,392,061) —

(6) 30 March 2011 0.56 0.5519 6,300,000 — 92,061 (6,392,061) —

(8) 12 April 2012 0.55 0.5421 7,000,000 — 102,290 (7,102,290) —

(9) 25 April 2013 0.642 0.6328 7,000,000 — 102,290 (7,102,290) —

Mr. Ng Ian (Director) (1) 28 October 2005 0.676 0.6663 2,000,000 — 29,225 — 2,029,225

(2) 2 April 2007 0.686 0.6761 2,000,000 — 29,225 — 2,029,225

(3) 31 August 2007 1.156 1.1394 1,000,000 — 14,612 — 1,014,612

(4) 24 March 2010 0.45 0.4435 6,300,000 — 92,061 — 6,392,061

(6) 30 March 2011 0.56 0.5519 6,300,000 — 92,061 — 6,392,061

(8) 12 April 2012 0.55 0.5421 7,000,000 — 102,290 — 7,102,290

(9) 25 April 2013 0.642 0.6328 7,000,000 — 102,290 — 7,102,290

Mr. Mak Wah Chi (Director)

(2) 2 April 2007 0.686 0.6761 2,000,000 — 29,225 — 2,029,225

Eligible participants (1) 28 October 2005 0.676 0.6663 640,000 — 9,352 — 649,352

(2) 2 April 2007 0.686 0.6761 2,000,000 — 29,225 — 2,029,225

(3) 31 August 2007 1.156 1.1394 1,000,000 — 14,612 — 1,014,612

Employees (2) 2 April 2007 0.686 0.6761 500,000 — 7,306 — 507,306

(7) 18 April 2011 0.66 0.6505 3,500,000 — 51,144 — 3,551,144

72,840,000 — 1,064,392 (32,061,764) 41,842,628



Notes:

(1) The exercisable period is from 28 October 2005 to 27 October 2015 (both dates inclusive).

(2) The exercisable period is from 2 April 2007 to 1 April 2017 (both dates inclusive).

(3) The exercisable period is from 31 August 2007 to 30 August 2017 (both dates inclusive).

(4) The exercisable period is from 24 March 2010 to 23 March 2020 (both dates inclusive).


(6) The exercisable period is from 30 March 2011 to 29 March 2021 (both dates inclusive).




(10) Adjustments for the Open Offer applicable to the outstanding share options as of 4 September 2014 with

effect from 4 September 2014.



The primary purpose of the 2013 Scheme is to provide incentives to participants (as defined

including but not limited to (a) any employees; (b) any supplier of goods or services to any

member of the Group; (c) any customer of the Group; and (d) any director or independent

non-executive director and/or shareholder of the Company and/or any member of the Group)

who has contribution to the Group and to enable the Group to recruit and retain high caliber

employees.

Details of the movement of the share options granted under the 2013 Scheme were as

follows:

Number of share options

Name of Grantee Notes Date of grant

Exercise price per

share before adjustments

Exercise price per

share after adjustments

(Note 3)

Outstanding as at 1 April

2014

Granted during

the period

Adjustments during

the period (Note 3)

Exercised during

the period

Outstanding as at

30 September 2014

HK$ HK$

Mr. Ng Chun For, Henry (Director)

(1) 30 April 2014 1.036 1.0211 — 4,600,000 67,219 (4,667,219) —

Mr. Ng Ian (Director) (1) 30 April 2014 1.036 1.0211 — 4,600,000 67,219 — 4,667,219

Mr. Chan Kwok Hung (Director)

(1) 30 April 2014 1.036 1.0211 — 1,000,000 14,612 — 1,014,612

(2) 5 September 2014 0.91 N/A — 4,350,000 — — 4,350,000

Eligible participant (1) 30 April 2014 1.036 1.0211 — 7,000,000 102,290 — 7,102,290

— 21,550,000 251,340 (4,667,219) 17,134,121

Notes:


(2) The exercisable period is from 5 September 2014 to 4 September 2024 (both dates inclusive).

(3) Adjustments for the Open Offer applicable to the outstanding share options as of 4 September 2014 with

effect from 4 September 2014.



DIRECTORS’ AND CHIEF EXECUTIVES’ INTERESTS AND SHORT POSITIONS IN SHARES, UNDERLYING SHARES AND DEBENTURES OF THE COMPANY OR ANY OF ITS ASSOCIATED CORPORATIONSAs at 30 September 2014, the interests or short positions of the directors and chief executives of the Company in the shares, underlying shares and debentures of the Company or any of its associated corporations (within the meaning of Part XV of the Securities and Futures Ordinance (the ‘‘SFO’’)), which were notified to the Company and The Stock Exchange of Hong Kong Limited (‘‘Stock Exchange’’) pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests or short positions which they were taken or deemed to have under such provisions of the SFO), or which were recorded in the register required to be kept by the Company under Section 352 of the SFO, or which were required, pursuant to the Model Code for Securities Transactions by directors of Listed Issuers (‘‘Model Code’’) set out in Appendix 10 to the Rules Governing the Listing of Securities on the Stock Exchange (‘‘Listing Rules’’) as adopted by the Company, to be notified to the Company and the Stock Exchange, were as follows:

(I) Interests and Short Positions in the Shares, Underlying Shares and Debentures of the Company

(a) Long positions in ordinary shares of HK$0.1 each of the Company (“Share”)

Number of ordinary shares held, capacity and nature of interests

Approximate percentage

of the Company’s

total issued share capital

%Name of directorPersonal interests

Corporate interests Total

Mr. Ng Ian 49,322,088 579,580,665 (Note 1)

628,902,753 67.74%

Mr. Ng Chun For, Henry

127,200 — 127,200 0.01%

Note 1: These 579,580,665 Shares represented the aggregate of (i) 568,676,782 Shares held by Golden Tool International Limited (“Golden Tool”), a company wholly and beneficially owned by Mr. Ng Ian; and (ii) 10,903,883 Shares held by Trade Icon Holdings Limited (“Trade Icon”), a company wholly and beneficially owned by Mr. Ng Ian.



(b) Long positions in underlying Shares of share options of

the Company

Share options granted under the 2003 SchemeAs at 30 September 2014, the following directors had personal interests in share options granted under the 2003 Scheme were as follows:

Name of director Date of grant Exercisable period

Exercise price

per share

Number of share

options outstanding

Approximate percentage of

interest in issued share

capitalHK$

Mr. Ng Ian 28 October 2005 28 October 2005 to 27 October 2015 0.6683 2,029,225 0.22%2 April 2007 2 April 2007 to 1 April 2017 0.6761 2,029,225 0.22%31 August 2007 31 August 2007 to 30 August 2017 1.1394 1,014,612 0.11%24 March 2010 24 March 2010 to 23 March 2020 0.4435 6,392,061 0.69%30 March 2011 30 March 2011 to 29 March 2021 0.5519 6,392,061 0.69%12 April 2012 12 April 2012 to 11 April 2022 0.5421 7,102,290 0.76%25 April 2013 25 April 2013 to 24 April 2023 0.6328 7,102,290 0.76%

32,061,764 3.45%

Mr. Mak Wah Chi 2 April 2007 2 April 2007 to 1 April 2017 0.6761 2,029,225 0.22%

Share options granted under the 2013 SchemeAs at 30 September 2014, the following directors had personal interests in share options granted under the 2013 Scheme were as follows:

Name of director Date of grant Exercisable period

Exercise price

per share

Number of share

options outstanding


interest in issued share

capitalHK$

Mr. Ng Ian 30 April 2014 30 April 2014 to 29 April 2024 1.0211 4,667,219 0.50%

Mr. Chan Kwok Hung 30 April 2014 30 April 2014 to 29 April 2024 1.0211 1,014,612 0.11%

5 September 2014

5 September 2014 to 4 September 2024

0.914,350,000 0.47%

5,364,612 0.58%



(II) Interests and Short Positions in the Shares, Underlying Shares and Debentures of Associated Corporations of the CompanyLong positions in the shares of associated corporations of the Company:

Name of director

Name of associated corporation

Capacity and nature of interests

Number of issued

ordinary shares held


issued share capital of the

associated corporation

as at 30 September 2014

Mr. Ng Ian Golden Tool Personal interests (held as beneficial owner)

1 100%

Mr. Ng Ian Trade Icon Personal interests (held as beneficial owner)

1 100%

Save as disclosed above, as at 30 September 2014, none of the directors or chief

executives of the Company and their respective associates had any interests or short

positions in the Shares, underlying Shares and debentures of the Company or any of

its associated corporations (within the meaning of Part XV of the SFO) which would

have to be notified to the Company and the Stock Exchange pursuant to Divisions 7

and 8 of Part XV of the SFO (including interests or short positions which they were

taken or deemed to have under such provisions of the SFO), or which were recorded

in the register required to be kept by the Company under Section 352 of the SFO, or

which were required to be notified to the Company and the Stock Exchange pursuant

to the Model Code.



SUBSTANTIAL SHAREHOLDERSSo far as is known to any directors or chief executives of the Company, as at 30 September 2014, shareholders who had interests or short positions in the Shares or underlying Share of the Company which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO or which were recorded in the register required to be kept by the Company under Section 336 of the SFO or had otherwise been notified to the Company were as follows:

Long positions in the Shares or Underlying Share

Name of shareholder NotesCapacity and nature of interests

Number of Shares


the Company’s total issued

share capital

Mr. Ng Ian (1) Personal and interests in corporation

665,631,736 71.70%

Golden Tool (1) Beneficial owner 568,676,782 61.26%

Mr. Chan Kwai Ping, Albert

(2) Personal and interests in corporation

85,962,138 9.26%

Morden Choice Limited (“Morden Choice”)

(2) Beneficial owner 78,859,848 8.49%

Note 1: Mr. Ng Ian was taken to be interested in 665,631,736 Shares in the Company (being the aggregate of

(i) personal interests of 49,322,088 Shares; (ii) personal interests of 36,728,983 share options (of which

32,061,764 share options under the 2003 Scheme and 4,667,219 share options under the 2013 Scheme);

and (iii) corporate interests of 579,580,665 Shares (of which 568,676,782 Shares through Golden Tool

and 10,903,883 Shares through Trade Icon).

Note 2: Mr. Chan Kwai Ping, Albert was taken to be interested in 85,962,138 Shares in the Company (being the

aggregate of (i) personal interests of 7,102,290 share options under the 2013 Scheme; and (ii) corporate

interests of 78,859,848 Shares through Morden Choice.

Save as disclosed above, as at 30 September 2014, the Company has not been notified by

any persons who had interests or short positions in the Shares or underlying Shares of the

Company which would fall to be disclosed to the Company under the provisions of Divisions

2 and 3 of Part XV of the SFO, or which were recorded in the register required to be kept

by the Company under Section 336 of the SFO.



COMPLIANCE WITH THE CODE ON CORPORATE GOVERNANCE PRACTICESThe Company has complied with the Corporate Governance Code (the “CG Code”) as set

out in Appendix 14 of the Listing Rules during the period under review, with the following

exceptions that:

1. Code provision A.4.1 of the CG Code stipulates that non-executive Directors should

be appointed for a specific term, subject to re-election. The non-executive Director Mr.

Ng Chun For, Henry would hold office as a non-executive Director of the Company

until the close of the annual general meeting of the Company for year 2015–2016

subject to retirement and rotation in accordance with the Bye-laws of the Company.

The other non-executive Director, Mr. Mak Wah Chi and all the independent non-

executive Directors Mr. Li Kit Chee, Mr. Chu Tak Sum and Mr. Chan Kam Man, were

re-elected at the AGM held on 5 September 2014 to hold office until the conclusion

of the next annual general meeting of the Company. As such, all non-executive

Directors including the independent non-executive Directors have been appointed for

a specific term and accordingly the Company has been in compliance with the code

provision A.4.1.

2. Code provision A.2.1 of the CG Code stipulates that the roles of chairman and chief

executive officer should be separate and should not be performed by the same

individual. After the appointment of Mr. Ng Ian as the Chairman of the Company with

effect from 28 March 2013, he resigned as the Deputy Chairman and Chief Executive

Officer (“CEO”) of the Company. The Board considered that the management structure

of the Board could be optimised by Mr. Ng Ian (the former CEO of the Company, the

current Chairman and executive Director of the Company) taking up both the roles of

Chairman and CEO of the Company after considering the following factors:

a. it will not impair the balance of power and authority between the Board and

the management of the Company. The balance of power and authority is

ensured by the operations of the Board, which comprises experienced and high

calibre individuals who meet regularly to discuss issues pertaining to the

operations of the Company;



b. it is conducive to strong and consistent leadership, and enables the Group to

make and implement decisions promptly and efficiently; and

c. it is beneficial to the Company and its shareholders as a whole having taken

into account that the Group’s business scale has been narrowed down to

business operation in Hong Kong after disposal of the joint-venture-based

property under construction (located at No.68 Yu Yuan Road, Jing An district

of Shanghai).

3. Code provision A.6.7 of the CG Code stipulates that independent non-executive

Directors and other non-executive Directors should attend the general meetings of the

Company. Mr. Ng Chun For, Henry due to other prior business engagement, was

unable to attend the AGM of the Company held on 5 September 2014.

Review by Audit CommitteeThe Audit Committee comprises an non-executive director and two independent non-executive

directors, namely, Mr. Mak Wah Chi, Mr. Li Kit Chee (Chairman of the Audit Committee)

and Mr. Chan Kam Man. The Audit Committee had reviewed with management the

accounting principles and practices adopted by the Group and discussed auditing, internal

control and financial reporting matters including the review of the unaudited Interim Financial

Statements for the six months ended 30 September 2014.

Compliance with the Model Code for Securities TransactionsThe Company has adopted the Model Code for Securities Transactions by directors of Listed

Issuers (the “Model Code”) as set out in Appendix 10 to the Listing Rules as its own code

of conduct regarding securities transactions by directors of the Company. All directors have

confirmed, following specific enquiry by the Company, that they have fully complied with

the required standard as set out in the Model Code throughout the period under review.

PURCHASE, SALE OR REDEMPTION OF THE COMPANY’S LISTED SECURITIESNeither the Company nor any of its subsidiaries purchased, sold or redeemed any of the

Company’s listed securities during the period under review.



CHANGES IN INFORMATION OF DIRECTORSSave as disclosed below, during the period under review, there is no change in the information

of the Directors required to be disclosed pursuant to Rule 13.51B(1) of the Listing Rules.

Name of Director Details of changes

Mr. Chu Tak Sum (“Mr. Chu”)

With effect from 15 September 2014, Mr. Chu appointed as independent non-executive director of Sam Woo Construction Group Limited whose shares are listed on the Main Board of the Stock Exchange with stock code 3822 and started its initial public offer dealing in shares commenced on 16 October 2014.

Mr. Chan Kwok Hung (“Mr. Chan”)

Mr. Chan has no service contract with the Company and the salary of Mr. Chan for the role as Executive Director has been increased to HK$100,000 per month with effect from 1 September 2014.

By order of the Board

Henry Group Holdings Limited

Ng Ian

Chairman

Hong Kong, 21 November 2014

The directors of the Company as at the date of this report are:

Executive directors

Mr. Ng Ian (Chairman)

Mr. Chan Kwok Hung

Non-executive directors

Mr. Ng Chun For, Henry

Mr. Mak Wah Chi

Independent non-executive directors

Mr. Li Kit Chee

Mr. Chan Kam Man

Mr. Chu Tak Sum

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